11.5 monitoring and controlling Flashcards
1
Q
Financial Controls
A
- Cash flow statement
- Income statement
- Balance sheet
2
Q
Cash Flow Statement
A
- Indicates the movement of cash receipts and cash payments resulting from transactions over a period of time
- Operating activities
- Investing activities
- Financing activities
3
Q
Cash Flow Statement: OPERATING ACTIVITIES
A
- Cash inflows and outflows relating to the provision of goods and services
E.G. Payments to suppliers, rent, advertising
4
Q
Cash Flow Statement: INVESTING ACTIVITIES
A
- Cash inflows and outflows relating to the purchase and sale of non-current assets and investments
E.G. Purchasing new equiptment
5
Q
Cash Flow Statement: FINANCING ACTIVITIES
A
- Cash inflows and outflows relating to the borrowing activities of the business
E.G. Equity and debt
6
Q
Income Statement
A
- Summary of the income earned and the expenses incurred over a period of time
- How much money has come into the business as revenue
- How much has gone out as expenditure
- How much money has been derived as profit
7
Q
Cost of good sold
A
- Money spent on purchases of raw materials or finished goods for resale
8
Q
Gross Profit
A
- Revenue - cost of goods sold
9
Q
Net Profit
A
- Gross profit - expenses
10
Q
Balance Sheets
A
- Business’s assets and liabilities at a particular point in time
- Represents the net worth of the business
11
Q
Balance Sheet Indications
A
- Whether the business has enough assets to cover its debts
- Whether the interest and money borrowed can be paid
- Whether the assets of the business are being used to maximise profits
12
Q
Assets
A
- Items of value owned by the business
13
Q
Liabilities
A
- Claims by people other than owners against the assets
- Represents what is owed by the business
